MAKING SENSE OF OUTPERFORMANCE

I've been trying to come to terms with this week's strange action where MLPS have pretty much been flat while the broad market has been down four days in a row. The S&P is down 5% this week while the MLP index is down less than 1 percent. And we closed up yesterday with the dow down 150. And this morning the outperformance continues as we see an oversold rally developing. The mlp index is up 2 and back near the top of the neckline at 305.






Notice the six month spread is 10%..we're up 5 and the market is down 5. The movements this week i think are end of quarter related and you wonder if it all gets undone late next week. Also i am not fond of the tape action overall. Frankly its become very disturbing and i wonder whether the market is coming to terms with the fact that deflation may be taking hold here. 10 year rates at 3% are not saying good things about the economy.

Still the rally continues this Friday morning as we are now up nearly 2.50 on the mlp index with the overall market flat. Kinder Morgan (KMP) Buckeye (BPL) and Williams Partners (WPZ) lead the winners list with 50 cent plus gains. No notable losers.

Watch the tape for any signs of a slow fade again although Fridays tend to draw buyers late in the day going into the weekend. Tropics may be heating up as it looks like something is trying to form in the Western Caribbean which could mean a Gulf of Mexico impact next week. By the way guess who has a vacation planned in Panama City Beach FL in a couple of weeks!